American International Group (AIG) and the U.S. administration unveiled Thursday on the plan that would enable the insurer to begin paying next year on some $ 182.3 billion (134 billion euros) of state aid received since her rescue there just two years.
The agreement, reached after a meeting Wednesday between the directors of AIG and representatives of federal authorities, shows that the group is gradually reducing its dependence on public funds, although the return to normal must pass through a first time by a new increased state participation.
At the NYSE, AIG's share gained 6.5% up in the morning before reducing its earnings in the wake of the major indexes.
The plan provides for the conversion into common shares of some of the preferred securities held by the Treasury, prior to an assignment of this progressive market participation.
AIG will repay the same time received $ 20 billion under a credit facility open by the Federal Reserve Bank of New York, drawing on the proceeds from sale of assets such as its life insurance subsidiary in Asia AIA.
The Group Managing Director, Robert Benmosche, told Reuters the group was negotiating with its bank credit line of about three billion dollars intended to substitute for the ease of the Fed.
He said a sale of the aircraft leasing subsidiary, ILFC or subsidiary of United Guaranty Credit Insurance were also considered.
POLICY ISSUE
The administration of President Barack Obama is working to prove that the state manages to pull out of many expensive devices and support the financial sector implemented during the crisis, which accounted for up to 1,000 billion dollars in total .
The situation of the financial system, the state action in this area and economic conditions would weigh heavily in the midterm elections in the United States on November 2.
The TARP (Troubled Asset Relief Program) developed at the height of the financial turmoil of the fall of 2008 expires Sunday.
According to the repayment plan for AIG, the Treasury will receive approximately 1.66 billion ordinary shares representing 62 billion at Wednesday's closing price, in exchange for preferred stock valued 49.1 billion.
This transaction is expected to be completed by end March 2011, thus lead to a gain lantente over ten billion dollars, while paying the state participation to 92.1%.
AIG will also issue up to 75 million warrants to its shareholders shares of common stock at an exercise price of $ 45 per share.
The exchange of shares reserved for the Treasury will not begin until the repayment of the entire facility of the New York Fed.
This should be funded among others by the IPO to come AIA and sale of American Life Insurance Company (ALICO) to MetLife, a pledged $ 15.5 billion.